Canadian banks plan to maintain staff numbers
2023.01.26 09:09
Canadian banks plan to maintain staff numbers
By Ray Johnson
Budrigannews.com – According to headhunters and industry executives, some of the most prominent investment banks in Canada intend to maintain their staffing levels throughout business cycles to meet client expectations for the same level of coverage.
Investment banks in the United States, like Goldman Sachs (NYSE:), On January 11, the company began laying off over 3,000 workers, citing a difficult macroeconomic environment. This raised concerns that Canadian banks might follow suit. Many Canadian investment banks, like their counterparts worldwide, had increased staffing during the pandemic, but dealmaking slowed last year.
For instance, the capital markets division at Royal Bank of Canada, the largest lender in the country, saw a 71% increase in headcount to 6,887 employees over the two years ending October 31, 2022.
However, Canadian dealmaking decreased by 39.7% to $89.7 billion last year. Dealogic’s data indicate that this is greater than the 36% drop in global deal values to $3.8 trillion following a stellar 2021.
However, despite the fact that dealmaking in the new year is down nearly 50% to $3.2 billion from a year ago, according to Dealogic, Canadian banks have not announced layoffs and some have even stated that they may increase headcount.
Dominique Fortier, a partner at the recruitment firm Heidrick & Struggles (NASDAQ:), says:
“Right now there is a sense that there isn’t a need for cuts in the system.”
“I don’t see that we’ll have the same decrease in terms of headcount coming,” says “when there was an upswing in 2021, it happened so quickly that there was no corresponding increase in hiring.”
Dominion Bank of Toronto (NYSE:), A spokesperson stated that the company, which last year agreed to purchase Cowen Inc., a boutique investment bank based in New York, anticipates continuing to expand its global investment banking business as it works toward closing the deal.
A spokesperson stated that Desjardins, another Canadian lender, will continue to invest in its expanding capital markets division.
Bill Vlaad, a recruiter based in Toronto who specializes in the financial services industry, stated that although there was some concern regarding the stability of investment banking teams, Canada is unlikely to experience redundancies comparable to those in the United States, with the exception of the annual elimination of underperformers known as “maintenance layoffs.”
The United States is very agile. They will quickly enter and exit hotspots. Vlaad stated, “Canada does not have the same luxury and must maintain relatively consistent coverage.”
“You have a group of people who work consistently, and they don’t change much from year to year or decade to decade.”
However, bonuses may be affected if dealmaking experiences another down year.
RBC, which came in first place 2 in Canada M&A, equity capital markets, and debt capital markets last year, according to Dealogic. According to a source with knowledge of the situation, there are no layoff plans for investment banking in Canada.
Scotiabank, Canadian Imperial Bank of Commerce, and JP Morgan, which topped the M&A league table last year, declined to comment. BMO did not respond to inquiries for clarification.
Lawyers and headhunters claim that laying off bankers is less expensive in the United States than it is in Canada.
According to Howard Levitt, a senior partner at the employment law firm Levitt Sheikh, Canadian investment banking employees would be eligible for full severance pay for anywhere from four to 27 months, depending on their status, re-employability, age, and length of service.
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